The Bay Area needs to act like a city-state

CALIFORNIA'S ECONOMIC FUTURE

Heavy rain clouds loom over the skyline of San Francisco as seen from Sausalito, Calif., on December 15, 2008.

Heavy rain clouds loom over the skyline of San Francisco as seen from Sausalito, Calif., on December 15, 2008.

Photo: Frederic Larson, The Chronicle

Photo: Frederic Larson, The Chronicle

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Heavy rain clouds loom over the skyline of San Francisco as seen from Sausalito, Calif., on December 15, 2008.

Heavy rain clouds loom over the skyline of San Francisco as seen from Sausalito, Calif., on December 15, 2008.

Photo: Frederic Larson, The Chronicle

The Bay Area needs to act like a city-state

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It is July and once again California has no budget. The Legislature is gridlocked and the governor is wrestling with state Controller John Chiang in a reprise of his annual minimum-wage stunt. In short, Sacramento is fiddling its tired old tune while California's economy crumbles.

It is clear that Sacramento can't solve California's problems. It is also clear that California's voters are unwilling to force real change, preferring merely to add to the state's thicket of ruinous, gridlock-inducing initiatives. Meanwhile, the mess in Sacramento is threatening the Bay Area's economic future.

That is why the Bay Area needs to start thinking like a city-state. In an age when nations have become so large that their citizens no longer identify with distant governments, city-states are political units large enough to have a global economic impact but small enough for even the most casual citizen to understand the relationships that make their city-state work. Politicians are local and thus more inclined to pragmatism and constructive action. Businesses understand that their fortunes are tied to the success of the local community. This balance between effect and size and the tendency toward social cohesion make contemporary city-states like Singapore and Hong Kong bright spots in an uncertain global economy.

The Bay Area has all the qualities of a successful city-state. Consider geography: The Bay Area isn't an island like Singapore but, like Hong Kong, it is defined by a central bay and bordered by mountains. There are no "Welcome to the Bay Area" signs on our highways, yet we all know where we leave the rest of California and enter the Bay Area.

Successful city-states have outsize economies compared to their neighbors'. If the Bay Area were to secede from California, it would instantly become the world's 25th largest economy, ahead of Austria, Taiwan, Greece and Denmark.

City-states have global business reputations. Singapore is synonymous with pragmatic corruption-free business; Hong Kong is famous for its trading savvy. The Bay Area is the global model for innovation and entrepreneurship, a fact underscored by Russian President Dmitry Medvedev's recent pilgrimage to Silicon Valley in search of new ideas. The Bay Area has launched industries from personal computing and digital media to biotech, and is home to more fast-growing companies than anywhere else in the United States.

City-states have distinct identities. The Bay Area is at once diverse and socially cohesive, with a strong sense of self-identity. Residents may joke about the Bay to Breakers or the latest resolution passed by the People's Republic of Berkeley, but they are also quick to explain to outsiders why the Bay Area is so special. This cohesion can be the basis of an all-important common ground, missing elsewhere in California as the Bay Area faces up to the coming economic challenges.

City-states have pragmatic governments. Pragmatism grows up from the local level, where decisionmakers witness the consequences of their decisions in their own backyards. Bay Area cities may be in considerable pain, but cities like San Jose started facing up to their problems years before Sacramento got serious, and towns like San Carlos have been proactive in attempts to re-engineer services (the city recently outsourced its police department). The Bay Area might not resemble Singapore with its highly disciplined government ministries, but our local governmental bodies have shown remarkable foresight in creating regional bodies like BART, the Metropolitan Transportation Commission, the Association of Bay Area Governments and the Bay Area Air Quality Management District to achieve pragmatic long-term goals. City-states also have awkward relationships with their neighbors. Malaysia still resents Singapore's independence and success, and Hong Kong citizens regularly oppose policies imposed on it by Beijing's central government. The Bay Area hasn't experienced this sort of tension with Sacramento, or other California regions, but it is time to do so. Tension would signal that the Bay Area is finally acting as a single body when it comes to looking out for its vital interests.

As a city-state, the Bay Area needs to remind our representatives in Sacramento that they represent us, not the entire state, much less a political party. Our local politicians also need to make themselves heard directly in Sacramento and Washington as Bay Area voices and not merely as representatives of local cities. And Bay Area business, academic and cultural leaders need to do the same.

This sounds like a recipe for regional selfishness, but it also could be what breaks California's ruinous political gridlock and rescues the Golden State's economy. A sudden outbreak of city-state pragmatism might shock Sacramento out of its ideological deadlock and into a serious exploration of how to effect essential but unpopular solutions - from service cuts and tax increases to a rewriting of our state Constitution.

And if the rest of the state doesn't come to its senses, perhaps the Bay Area should follow Singapore's example in 1965 and threaten to secede. If we stopped tax payments to Sacramento and embargoed the export of iPhones, the rest of California would beg us to return - and on our own terms.

Discussion: Where is the state going?

Staying competitive in a flat world

What: A discussion of big-picture trends in California over the next 20 to 30 years.